The selling so far has been broad-based, though the declines in major indexes have been modest. The Dow Jones Industrial Average
DJIA, +0.14%
was lately off 63 points, or 0.6%, to 10,601.26, hurt by a 9.7% plunge in component Alcoa Inc.
AA, +1.46%
after the aluminum maker's weaker-than-expected fourth-quarter report released late Monday. Alcoa posted a $277 million loss with lower sales in its construction, aerospace, commercial-building and gas-turbine markets. Read more about Alcoa's results.

The report marked the unofficial start to the broader fourth-quarter reporting season, during which analysts are expecting to see the Standard & Poor's 500 Index's
SPX, -0.07%
earnings more than double compared to 2008's year-end period. Despite the sour note struck by Alcoa as the first Dow component to report, many traders and analysts hesitated on Tuesday to ratchet back their hopes for broader strength in profits, which have been helped the last few quarters by aggressive cost-cutting.

"People always watch for the Alcoa numbers, but it's not necessarily the most representative marker of the economy at this point," said Cantor Fitzgerald strategist Marc Pado. He said he's particularly curious to see earnings due Thursday from Intel Corp.
INTC, -0.89%,
since its chips are basic components of an array of devices used by both consumers and businesses.

"We've had a very successful, technology-driven bull market" since the market's March lows, said Pado. "Intel is very much at the heart of that, and they need to succeed for things to continue in the right direction."

The tech-driven Nasdaq Composite Index
COMP, -0.22%
was recently down 1.4%. The S&P 500 declined 1.1%. Its energy and materials sectors dragged as the price of crude oil, which had topped $83 a barrel on Monday, reversed course and fell to less than $82 a barrel. Investors noted that the slightly warmer weather likely contributed to the pullback in oil prices.

The only sector in the S&P 500 posting a gain was consumer staples, a traditional safe haven that edged up 0.3%. The consumer-discretionary sector was among the index's weakest groups, off 1.5%.

Investors also focused Tuesday on a several earnings forecasts and quarterly releases from companies aside from Alcoa. Hartford Financial Services Group
HIG, +0.65%
shares rose 7% after the company doubled its fourth-quarter earnings guidance as rising financial markets and a mild storm season helped its businesses.

KB Home
KBH, -0.43%
declined 6.5% after the home builder swung to a fiscal fourth-quarter profit. A tax benefit helped it beat expectations, but its revenue tumbled as home prices continue to fall. Read more about KB Home's results.

Frank Ingarra, co-portfolio manager at Hennessy Funds, said the reports only added to investors' concerns, noting the average retail investor is still skeptical of the economy's recovery and hesitant to wade into stocks.

"They're still scared and you see that in the mutual-fund flows," Ingarra said. "Every retail investor is focusing on unemployment, and all this other data is unfortunately just reinforcing that they shouldn't be in the market, but for long-term investors it's a great buying opportunity."

In economic news Tuesday, data showed national chain-store sales were down 1% in the first week of the month compared with December, according to Redbook Research's latest indicator of national retail sales. Analysts had expected a 1.2% decline.

Separately, the International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index fell 3% in the week ended Saturday from the week before on a seasonally adjusted, comparable-store basis.

Investor sentiment wobbled after the Commerce Department reported that the U.S. deficit in international trade of goods and services had expanded more than expected in November, as surging oil prices helped imports grow faster than exports. Read more about the trade data.

Treasury prices were higher, with the 10-year note up 23/32 to yield 3.730%.

The dollar was mixed. One euro cost $1.4515, down from $1.4521 late Monday. One dollar fetched 90.94 Japanese yen, down from 92.09 yen.

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Dow Jones Network

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